“If you have a successful business, you will need more money.”
He also said:
“If you have an unsuccessful business, you will need more money.”
It might sound a little tongue-in-cheek, but this insight holds a powerful truth about entrepreneurship. Whether you are scaling up operations to meet growing demand or scrambling to stay afloat, capital is the lifeblood of any business. Without it, even the most brilliant ideas are doomed to fail.
In fact, the undisputed leading cause of business failure is simply running out of money before the company becomes profitable. According to the U.S. Small Business Administration, about 32% of new businesses fail during the first two years, and cash flow problems are a major contributing factor.
That’s why access to capital is not just important—it is absolutely critical.
Capital generally comes from two primary sources: Debt (loans) and Equity (investments in exchange for ownership shares). However, each comes with its own challenges and implications.
For startups and early-stage businesses, debt financing can be extremely difficult to obtain. Banks and traditional lenders are often reluctant to extend credit to businesses without a solid track record of profitability and a strong balance sheet. Even programs like SBA loans often require personal guarantees and significant collateral—things many entrepreneurs simply don’t have in the beginning.
That leaves equity financing as the most accessible path for many. Equity financing involves raising capital by selling shares of your business to investors. It’s a powerful way to secure the resources you need without having to take on debt—but it also means giving up some ownership and control.
When looking for equity partners, you don’t necessarily have to appear on “Shark Tank” or track down Silicon Valley venture capitalists. Opportunities for funding are often closer than you think.
Consider the successful or retired entrepreneurs you may know. Think about professionals like doctors, lawyers, or CPAs. These individuals make up about 70% of all U.S. millionaires, according to research from Thomas J. Stanley’s The Millionaire Next Door. They often seek investment opportunities outside of traditional stock markets and might be open to supporting a promising new business venture.
However, bringing on an equity partner isn’t just about getting money. It’s about finding someone who aligns with your vision, brings complementary skills or networks, and understands the risks and rewards of entrepreneurship.
Before you approach a potential investor, ask yourself:
How much capital do I need to achieve profitability?
How much equity am I willing to give up?
What additional value could an investor bring to the table beyond money?
Many entrepreneurs underestimate how much money they’ll actually need. It’s not just about funding the startup phase—it’s about surviving the inevitable bumps along the road, from unforeseen expenses to market shifts.
In short, the best time to think about funding your business is before you desperately need it.
So, take a hard look at your current financial runway. Are you prepared? Do you have enough access to capital to not only launch but survive and thrive?
Because, in business, it’s not if you’ll need more money—it’s when.
Do you have access to sufficient capital to fuel your entrepreneurial journey?
